Boston, MA 03/18/2014 (wallstreetpr) – Hastings Entertainment, Inc. (NASDAQ:HAST) is set to be swallowed by an entertainment conglomerate in a deal estimated to be worth $21.4 million, awaiting the approval of shareholders. The company has announced it has entered into an agreement with Hendrix Acquisition for the merger that will see it operate as a private entity. Part of the deal involves Hastings surviving as a wholly owned subsidiary of Draw another Circle LLC.
Hastings Entertainment, Inc. (NASDAQ:HAST) and Draw another Circle are owned by Joel Weinshanker who is the sole shareholder of National Collectibles association, a leading designer and marketer of licensed consumer goods. Hastings news release has confirmed that the acquisition is expected to close in the second quarter of the current year, subject to shareholder approval and customary closing conditions
The deal will not affect Hastings operation as it is expected to operate as a separate subsidiary, this is according to the company’s chief financial officer Dan Crow as the deal only entails the company going private. Hastings saw its revenue drop from a high of $548 million reported in 2006 to a low of $463 in 2012 having shed its workforce from a high of 7,000 to a low of 2000.
Going private has been mooted as the only best option, that will allow the company operate more independently without having to receive the backlash of financial analysts. The deal is expected to go through at a price tag of $3 a share which represents 57% of Hastings closing share price on Friday and 61% more than the 30 day moving average.
Hastings Entertainment, Inc. (NASDAQ:HAST) has not announced shareholder voting date with the company announcing its board of directors agreed unanimously on the merger deal. The merger agreement has already precipitated inquiries on behalf of shareholders on whether the board of directors might have broken any fiduciary duties with the impending merger.
Trip Levvy PLLC will try to find out on behalf of shareholders why Hastings Entertainment, Inc. (NASDAQ:HAST) did not engage a full and fair auction process for the sale of the company as this would have resulted in shareholders receiving full value of their shares. This is in response to analyst’s estimates that the company’s share value stands at $5 per share with the company’s book value alone being at $7.57 per share.
